The Roz Trust Has Distributable Net Income (DNI)for the Year

question 84

Multiple Choice

The Roz Trust has distributable net income (DNI) for the year of $100,000 and no income from tax-exempt sources.Under the terms of the trust instrument,the trustee must distribute $80,000 to Roger and $80,000 to Sally.After paying these amounts,the trustee is empowered to make additional distributions at its discretion.Exercising this authority,the trustee distributes an additional $40,000 to Roger and $20,000 to Sally.How much gross income from the trust must Roger recognize?

• A)$120,000.
• B)$100,000.
• C)$80,000.
• D)$50,000.

---

Definitions:

Usury Laws

Regulations that impose a maximum interest rate that can be charged on loans to prevent excessive and unfair interest rates.

Interest

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, or the income earned on deposited funds.

Rent

A periodic payment made by a tenant to a landlord for the use of land, premises, or other property.

Surplus

An excess of income or assets over expenditure in a given period, often referring to a government's budget.